Digital transformation has surpassed the skilled labour shortage as the top priority for Australian C-suite executives and board members from private sector enterprises.
This is according to the seventh edition of KPMG’s ‘Keeping us up at night survey’ of Australian business leaders reflects the fast pace of change facing organisations.
The survey results show that talent issues – having access to a sufficient number and range of quality workers – which had been a top priority for the majority of executives for the past few years, are now seemingly under control.
However, the exponential march of technology in corporate and personal lives is continuing to raise unease in leaders from a risk, investment return, and adaptation perspective.
As such, KPMG notes that the digital transformation – and extracting organisational value from it – rose from fourth place in the 2024 edition to number one in this year’s survey. More than half (53%) of Australian business leaders nominated this as their main concern for the next 12 months.
It also topped the list of concerns over the next three to five years, rising from fourth place in the 2024 survey. Second in the list for the next 12 months is Cyber (previously first place), while ‘new technologies’ including AI (previously sixth place) and ‘controlling costs’ in an inflationary environment (fifth last year) were joint-third in the priority list.
KPMG notes that technology and all its applications, both positive and negative, is clearly a fundamental risk that occupies the time and thoughts of business leaders.
“This latest survey, however, reinforces the findings from KPMG’s 2024 global CEO Outlook, which showed that as the world continues to emerge from the pandemic, the focus of business leaders back on core principles of growing revenue and managing costs has remained,” the firm reports.
“The risks and concerns about IT, AI, cyber security, and associated issues like ethical use, government regulations and investment cost/returns are becoming a more day-to-day challenge for Australia’s business leaders, as the delivery of goods and services becomes universally more technology dependent.
“What is interesting in this year’s survey is the rise in the ranking of ‘new technologies’, including AI, and the use cases and ethics that arise when implementing, which lifted from sixth place to equal 3rd place in the context of immediate risks, but has been elevated to second place when considered from a medium-term perspective. One interpretation of this increase has to do with the concern business leaders have around the ethical use of technology.”
While dealing with regulation has marginally slipped from last year, KPMG says the impact of regulation is central to another issue which has risen in importance for business leaders in 2025 – dealing with stakeholder expectations, including regulators.
“This issue, new to this year’s survey, came sixth in the list of priorities and reinforced other recent KPMG Australian and global research, which has identified it as a growing challenge both for executive management and board directors. On social issues concerning business leaders, housing availability and affordability has risen to the top, up from fifth a year ago,” KPMG says.
Geopolitics continues to be identified as a concern, with the past 12 months only adding to the unease. During 2024, more than half of the world’s population enjoyed the ability to participate in the democratic process of electing a government to lead them.
KPMG notes the outcome of these elections has shown two common themes – a cost-of-living backlash towards incumbent governments and a continued trend towards populist leadership and economic nationalism.
KPMG Australia surveyed respondents between 24 October and 16 November 2024. The firm received 320 valid responses. The respondents were a mix of C-suite executives and board members from private sector enterprises.
Write to Adam Orlando at Mining.com.au
Images: KPMG
